Path founder Dave Morin, at the Web 2.0 Summit in 2011.
James Martin/CNET

Path, the popular photo-sharing social network, is about to announce it has closed a $40 million round of funding that values the San Francisco startup at $250 million, according to sources who spoke to All Things D. Update 5:24 p.m.: Path said it has raised $30 million in a funding round.

The report, which came out late last night, said that the new round was led by Redpoint Ventures and could be announced as early as today.

The company, which was founded by Dave Morin, who co-created the Facebook Platform, and Shawn Fanning, the co-founder of Napster, has many fans because it allows users to set up fairly small, private networks for sharing their photographs. It also generated many detractors in February because of a scandal that revealed the company had been storing iPhone users' address books. Path later said that it was discontinuing the practice.

Now, Path's new funding puts it in a position to take on rivals like Instagram, which was just bought by Facebook, and Pinterest, which is widely considered a prime acquisition target. All Things D said Morin did not return a request for comment Sunday night.